CGST Commissionerate busts Rs.455 Crore Fake GST Invoice Racket

The Officers of CGST Mumbai South Commissionerate have busted a fake GST invoice racket, which was used to avail & pass on fake GST Input Tax Credit (ITC) of around Rs. 27.59 crore, on bogus invoices of Rs 455 Crores, and have arrested the director of M/s Ammy International Journal (OPC) Private Limited, the Principal Commissioner of CGST and CX, Mumbai (South) has informed in a press statement issued by the office.

The anti-evasion wing of the CGST Mumbai South Commissionerate had started an investigation after receiving specific information from the Central Intelligence Unit, CGST Mumbai Zone. It was discovered during the investigation that the taxpayer was not operating at the registered place of business. The company’s director declined to cooperate with the investigation and has been missing for the past few months. On 10.08.2022, he did join the investigation, and his testimony was recorded in which he acknowledged his involvement in the tax fraud.

Investigations showed that this company had submitted false claims for input tax credits totaling Rs. 14.15 crore and transferred false claims for input tax credits totaling Rs. 13.44 crore to numerous fictitious entities. False invoices totaling Rs. 455 crore were created in an effort to fraudulently obtain and transfer inadmissible input tax credits without actually supplying or receiving any products, which was a flagrant violation of the CGST Act, 2017.

The accused was detained on August 10, 2022, for violating Section 132 of the CGST Act, 2017, based on tangible evidence acquired during the inquiry and his acknowledgment of his involvement in this tax fraud. He was presented before Esplanade’s Honorable Additional Chief Metropolitan Magistrate. The Magistrate has remanded him to judicial custody for 14 days.

During the financial year 2021-22, the CGST Mumbai South Commissionerate had detected GST evasion of Rs.949 Crore, recovered Rs.18 Crore and arrested 9 tax evaders. This is the sixth arrest by the officers of CGST Mumbai South Commissionerate, in the current financial year.

Data analysis and network analysis tools are being used by CGST officials to locate and track suspected fraudsters. This case is a component of the CGST Mumbai Zone’s special campaign against tax evaders and bogus ITC networks. In the upcoming days, the CGST officers will step up their campaign against tax evaders.